Calculation of Basic and Diluted Earnings per Share

9 Months Ended

Sep. 30, 2014

Earnings per common share:

Calculation of Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

(in thousands, except per share amounts)		Three Months Ended September 30,				Nine Months Ended September 30,
		2014		2013		2014		2013
Numerator:
Net Income	$	296	$	113	$	1,156	$	188
Numerator for basic earnings per share - income available to common shareholders		296		113		1,156		188
Effect of dilutive securities:
Numerator for diluted earnings per share - income available to common shareholders after assumed conversions	$	296	$	113	$	1,156	$	188
Denominator:
Denominator for basic earnings per share - weighted-average shares		3,014		3,012		3,014		2,999
Effect of dilutive securities:
Employee stock options		4		8		1		2
Warrants		376		402		388		270
Dilutive potential common shares		380		410		389		272
Denominator for diluted earnings per share - weighted-average shares and assumed conversions		3,394		3,422		3,403		3,271
Basic earnings per common share	$	0.10	$	0.04	$	0.38	$	0.06
Diluted earnings per common share	$	0.09	$	0.03	$	0.34	$	0.06

For the three and nine month periods ended September 30, 2014 and 2013, approximately 134,000 and 88,000, respectively, of shares issuable upon exercise of employee stock options were excluded from the calculation of diluted earnings per share as the exercise price was greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive.